Last year, at the World Economic Forum, blockchain was one of the most widely cited words echoing through the alpine town of Davos. So much so that it signaled how blockchain and distributed ledger technologies were coming out of beta in 2018. At this year’s gathering of the world’s elite, despite substantial political no-shows amounting to 50% of the world’s GDP and 42% of the world’s population, blockchain’s movement from hype to impact is pressing ahead. This time rather than so many short-lived cryptocurrency issuances, blockchain has found a new home in the social innovation arena and in the emergence of the digital state, which may be the technology’s most lasting impact on the world.
In an ambitious project supported by Tata Trusts, India’s oldest philanthropy, carrying the eponymous name of the Tata family, and lead by New America’s Blockchain Trust Accelerator, a blueprint for blockchain and social innovation has been released. This blueprint, publicly announced at a Global Blockchain Business Council gathering in Davos, outlines many practical examples of how blockchain is being applied to tackle perennial development scourges like the erosion of institutional and public trust, economic friction and the lack of transparency and accountability in the public square. Use cases and real-world applications from e-voting using blockchain in West Virginia, enfranchising overseas military voters in the very democratic process they defend, to cases involving workers’ rights and supply chains are all highlighted in the report.
As a base layer solution using blockchain, a world where more than 1 billion people have no identity at all, is clearly an area where blockchain can enable people to have a digital twin of their identities that is at once permanent and secure. A blueprint outlining precisely how these projects are underway and can be translated to the social impact and government technology arena will help accelerate understanding and adoption. Along these lines, to find the most progress when it comes to digital state efforts and the embrace of blockchain among other emerging technologies, look no further than small island states, city states and innovative countries such as Estonia.
Public leaders from these locations recognize that as the global economy continues to decouple the fortunes of countries from those of companies and cities, how they embrace technology as a source of leverage is key. The Caribbean basin, for example, is home to the most robust and proven blockchain technology sandbox. The city state of Dubai has advanced a broad vision for Smart Dubai for not only going paperless, but for going long on citizen trust through applications of blockchain technology across the suite of government services. Governments as far afield as Bermuda’s, Gibraltar and Singapore are not only signaling their embrace of digital assets in their legal and regulatory codes, they are making strides towards enhancing efficiency, transparency and security of their functions using blockchain. All of this, amid an increasingly uncertain global economy where the bylines of recession, trade wars and national retrenchment tear at the seams of globalization.
The Blueprint for Blockchain and Social Innovation underscores many of the ways in which the blockchain movement is very different from previous waves of innovation and economic progress. The question of social good, justice and broad-based economic participation has been at the center of this wave since the outset. And while all eras of economic progress may come with negative externalities, what blockchain militates against are some of the world’s direst problems. From the erosion of institutional trust, to systemic doubts about the provenance, authenticity and veracity of value and information online, the role of blockchains in enhancing trust at scale is only now coming to light.
Globally the stakes are high in leveraging technologies such as blockchain to improve efficiency and the effectiveness of social innovation and governments. Not counting high government expense ratios as a share of GDP, which in the U.S. is around 36%, poor data quality costs the U.S. economy $3 trillion per year. In this sense where the internet was a disruptive technology upending traditional business and economic models, blockchain should be viewed as an augmenting technology that can help deliver a high-trust low-friction proposition to the world. This much is being demanded at ballot boxes and in street protests in the west and is one of the keys to pulling billions of marginalized people into the global economy in the first place. The case for social innovation and the digital transformation of the state could not be more urgent. A powerful new primer is available to show the world’s leaders how to unluck the stranded asset of public trust.
